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2010 Too Late For Windows 7 To Save Microsoft

Microsoft needs to ship Windows 7 as soon as possible. If that wasn't obvious before Thursday, it sure is now. Despite two years of positive spin from Redmond, it's clear that Windows Vista is one of the biggest flops in computing history. And each day that passes with Vista still on the market brings Microsoft another day closer to the abyss.

For the record, Windows (mostly Vista) sales fell 8% in Microsoft's second quarter. Worse, the internal group that houses Vista, which Microsoft calls the client unit, recorded a 13% decline in operating profit. The culprit: "Decreased revenue and increased sales and marketing expenses," Microsoft says.

In other words, those expensive but nonsensical Seinfeld ads actually helped drive Windows sales lower.

Microsoft wants to blame it all on the economy. "We're not immune," Steve Ballmer says. But Apple exists in the same economy, and it managed to boost Mac sales by 9% in the quarter. (Zune sales plunged 53% in the quarter even as iPod sales increased 3%, but that's a different story.)

The fact is, Microsoft's dismal second-quarter performance and its plan to cut 5,000 jobs are largely down to Vista -- the big, fat OS that couldn't.

That brings us to Windows 7. Early reports and user feedback indicate that Microsoft has gotten this one right. Beta users say the new OS is lighter, faster, and more stable than its galumphing predecessor, and it actually lets you, say, transfer a file from one folder to another without calling the cops.

The problem? Microsoft to date has not committed to releasing a final version of Windows 7 before year's end. The company's official position is that Windows 7 will ship "approximately three years after the January 2007 general availability launch date of Windows Vista."

That would put Windows 7 PCs on store shelves sometime in early 2010. And that will be too late, way too late, for Microsoft and industry partners like Dell and HP.

Microsoft's second-quarter results reveal that Microsoft must -- absolutely must -- get Windows 7 out the door for the crucial 2009 holiday shopping season. If it doesn't, the company's second-quarter numbers will look rosy compared with what next year's results will show.

My bet is that Microsoft, despite all its byzantine bureaucracy, has finally gotten the message. There's a red alert in Redmond, so I'm predicting Windows 7 by Thanksgiving.

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